Public NSE’s Private Shareholders

November 5, 2009

The National Stock Exchange (NSE), which has moved the Delhi High Court against the Central Information Commission’s (CIC) ruling declaring it a ‘public authority’ under the Right to Information Act, has argued that its shareholding is widely dispersed and not held by government-owned entities. Frankly, if a first-level regulator mandated to supervise compliance with corporate disclosures under the listing agreement and watch out for market manipulation or insider trading is not a ‘public authority’, the RTI Act probably needs modification. However, NSE's affidavit to the Court says that in June 2007 only a 32.7% stake in the NSE was held by government institutions (this conveniently excluded a 28% combined holding by IFCI, State Bank of India, SBI Capital Markets and Stock Holding Corporation of India). It then argues that, on 15 July 2008, the shareholder list jumped from 27 to 47 with the entry of several Indian and foreign shareholders and certain individuals. As an unlisted, private company, the NSE is very choosy about who gets to own its expensive shares, so the list is interesting. And, while the placement to Goldman Sachs, New York Stock Exchange set valuation benchmarks, the other shareholders are more intriguing. They include well-known names like S Gopalkrishnan (of Infosys, holds a 0.38% stake), Azim Premji (3% stake), unusual ones like Rambhaben Ukabhai Tanti (mother of Suzlon's Tulsi Tanti, holds 85,000 shares) and unknown names such as Prithviraj S Kothari (30,000 shares; Google search shows he is MD of Riddhi Siddhi Bullion Ltd) Ratna Commercial Enterprises Pvt Limited (25,000 shares), Autometers Systems Limited (UK-based company, 35,000 shares), M3 Investment Private Limited Mumbai (55,000 shares). Other shareholders include Reliance Strategic Investments and Kampani Finance Limited.